Blog: NORTHERN LIGHTS ACQUISITION CORP. : Entry into a Material Definitive Agreement, Regulation FD Disclosure, Other Events, Financial Statements and Exhibits (form 8-K) – Marketscreener.com

Item 1.01. Entry into a Material Definitive Agreement.

As previously disclosed, on February 11, 2022, Northern Lights Acquisition
Corp., a Delaware corporation (the “Company”) and 5AK, LLC, the Company’s
sponsor (the “Sponsor”), entered into a definitive unit purchase agreement (the
“Unit Purchase Agreement”) with SHF, LLC d/b/a Safe Harbor Financial, a Colorado
limited liability company (the “Target”), SHF Holding Co., LLC, the sole member
of the Target (the “Seller”), and Partner Colorado Credit Union, the sole member
of the Seller (the “Seller Parent”), whereby the Company will purchase all of
the issued and outstanding membership interests of the Target from the Seller
(the “Business Combination”).

On June 16, 2022, the Company, the Target, and Midtown East Management NL LLC, a
Delaware limited liability company (“Midtown East”), entered into an agreement
(the “Forward Purchase Agreement”) for an OTC Equity Prepaid Forward Transaction
(the “Forward Purchase Transaction”). Pursuant to the terms of the Forward
Purchase Agreement (a) Midtown East intends, but is not obligated, to purchase
shares of the Company’s Class A Common Stock, par value $0.0001 per share
(“Class A Common Stock”), after the date of the Forward Purchase Agreement from
holders of Class A Common Stock, other than the Company or affiliates of the
Company, who have requested that their shares of Class A Common Stock be
redeemed or indicated an interest in having their shares of Class A Common Stock
redeemed pursuant to the redemption rights set forth in the Company’s Amended
and Restated Certificate of Incorporation in connection with the Business
Combination (such holders, “Redeeming Holders”) and (b) Midtown East has agreed
to waive any redemption rights in connection with the Business Combination with
respect to any shares of Class A Common Stock it purchases in accordance with
the Forward Purchase Agreement (the “Subject Shares”). The number of Subject
Shares shall be no more than the lesser of (i) 5,000,000 and (ii) the maximum
number of shares of Class A Common Stock such that Midtown East does not
beneficially own greater than 9.9% of the Class A Common Stock on a
post-combination pro forma basis. Midtown East will purchase any Additional
Shares (as defined in the Forward Purchase Agreement) at the Redemption Price
(as defined in Section 9.2 of the Amended and Restated Certificate of
Incorporation of the Company (the “Certificate of Incorporation”)), and has
undertaken to purchase all Subject Shares at a price no higher than the
Redemption Price.

The Forward Purchase Agreement provides that (a) one business day following the
closing of the Business Combination, the Company will pay to Midtown East, out
of the funds held in the Company’s trust account, an amount (the “Prepayment
Amount”) equal to the Redemption Price per share (the “Initial Price”)
multiplied by the aggregate number of Subject Shares and Additional Shares (as
defined in the Forward Purchase Agreement), if any (together, the “Number of
Shares”), on the date of such prepayment, (b) on the first business day of each
calendar quarter after the closing of the Business Combination, the Company will
pay to Midtown Madison Management LLC a structuring fee in the amount of $5,000
per quarter and (c) on the date occurring one settlement cycle following the
valuation date (which shall occur on the earlier of (i) the third anniversary of
the closing of the Business Combination and (ii) the date specified by Midtown
East in a written notice (not earlier than the day such notice is effective)
that, during any 30 consecutive scheduled trading day-period following the
closing of the Business Combination, the volume weighted average trading price
per share for 20 scheduled trading days during such period shall have been less
than $3.00 per share, Midtown East shall deliver to the Company the Number of
Shares less any Terminated Shares, as described below.

From time to time and on any scheduled trading day after the closing of the
Business Combination, Midtown East may sell Subject Shares or Additional Shares
(or any other shares of common stock or other securities of the Company) at its
absolute discretion in one or more transactions, publicly or privately, and, in
connection with such sales, terminate the Forward Purchase Transaction in whole
or in part in an amount corresponding to the number of Subject Shares or
Additional Shares sold (the “Terminated Shares”). At the end of each calendar
month during which any such early termination occurs, Midtown East will pay to
the Company an amount equal to the product of (x) the number of shares
terminated during such calendar month and (y) the Reset Price, where “Reset
Price” refers to, initially, the Redemption Price. The Reset Price will be
adjusted on the first scheduled trading day (as defined in the Forward Purchase
Agreement) of each month commencing on the first calendar month following the
closing of the Business Combination to be the lowest of (a) the then-current
Reset Price, (b) $10.00 and (c) the VWAP Price (as defined in the Forward
Purchase Agreement) of the last ten (10) scheduled trading days of the prior
calendar month, but not lower than $5.00; provided, however, that if the Company
offers and sells shares of Class A Common Stock in a follow-on offering, or
series of related offerings, at a price lower than, or upon any conversion or
exchange price of currently outstanding or future issuances of any securities
convertible or exchangeable for shares of Class A Common Stock being equal to a
price lower than, the then-current Reset Price (the “Offering Price”), then the
Reset Price shall be further reduced to equal the Offering Price.

The Company and Safe Harbor have agreed to pay (jointly and severally) to
Midtown East a break-up fee equal to the sum of (i) all quarterly structuring
fees and attorney fees and other reasonable expenses related thereto incurred by
Midtown East or its affiliates in connection with the Forward Purchase
Transaction, plus (ii) $1,000,000, upon the occurrence of an “Additional
Termination Event” following the consummation of the Forward Purchase
Transaction except where the Additional Termination Event occurred as a result
of regulatory items or a material breach of Seller’s obligations under the
Forward Purchase Agreement. An “Additional Termination Event” is defined under
the Forward Purchase Agreement to occur if (a) the Business Combination fails to
close on or before the Outside Date (as defined in the Unit Purchase Agreement,
and as such Outside Date may be amended or extended from time to time) or (b)
the Unit Purchase Agreement is terminated prior to the closing of the Business
Combination. Midtown East irrevocably waived any and all right, title and
interest, or any claim of any kind it has or may have in the future, in or to
any monies held in the Company’s trust account, and agreed not to seek recourse
against the trust account. Luminous Capital Inc., an affiliate of our Sponsor,
and Safe Harbor have agreed that any such break-up fee, if due, will be borne
equally by them.

Midtown East’s obligations to the Company under the Forward Purchase Agreement
are secured by perfected liens on (i) all cash proceeds of the sale, transfer,
. . .

Item 7.01. Regulation FD Disclosure.

On June 17, 2022, the Company issued a press release announcing its entry into
the Forward Purchase Agreement.

The information in this Item 7.01, including Exhibit 99.1, is being furnished
and will not be deemed to be filed for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject
to the liabilities of that section, nor will it be deemed to be incorporated by
reference in any filing under the Securities Act or the Exchange Act.


Item 8.01. Other Events.


The following disclosures supplement the disclosures contained in the definitive
proxy statement, which was filed by the Company with the U.S. Securities and
Exchange Commission (the “SEC”) and distributed on or about June 13, 2022 to the
Company’s stockholders of record as of the close business on May 19, 2022 in
connection with the Business Combination (the “Definitive Proxy Statement”).

The following disclosures should be read in conjunction with the disclosures
contained in the Definitive Proxy Statement, which should be read in its
entirety. To the extent that information set forth herein differs from or
updates information contained in the Definitive Proxy Statement, the information
contained herein supersedes the information contained in the Definitive Proxy
Statement. All page references are to pages in the Definitive Proxy Statement,
and any defined terms used but not defined herein shall have the meanings set
forth in the Definitive Proxy Statement.

Supplements to the Definitive Proxy Statement

The Definitive Proxy Statement is amended and supplemented on page 32 by adding
the following to the “SUMMARY OF THE PROXY STATEMENT – Related Agreements”
section of the Definitive Proxy Statement:

Forward Purchase Agreement

On June 16, 2022, the Company, the Target, and Midtown East Management NL LLC, a
Delaware limited liability company (“Midtown East”), entered into an agreement
(the “Forward Purchase Agreement”) for an OTC Equity Prepaid Forward Transaction
(the “Forward Purchase Transaction”). Pursuant to the terms of the Forward
Purchase Agreement (a) Midtown East intends, but is not obligated, to purchase
shares of the Class A Stock, after the date of the Forward Purchase Agreement
from holders of Class A Stock, other than the Company or affiliates of the
Company, who have redeemed shares of Class A Stock or indicated an interest in
redeeming shares of Class A Stock pursuant to the redemptions rights set forth
in the our Amended and Restated Certificate of Incorporation in connection with
the Business Combination and (b) Midtown East has agreed to waive any redemption
rights in connection with the Business Combination with respect to any shares of
Class A Stock it purchases in accordance with the Forward Purchase Agreement
(the “FPA Subject Shares”).

The Definitive Proxy Statement is amended and supplemented on page 83 by adding
the following at the end of the risk factor entitled “We and SHF will incur
significant transaction and transition costs in connection with the Business
Combination.”:

On June 16, 2022, the Company entered into the Forward Purchase Agreement with
Midtown East. To the extent Midtown East purchases shares of Class A Stock
pursuant to the Forward Purchase Transaction, one business day following the
closing of the Business Combination, the Company will pay to Midtown East, out
of funds held in the Trust Account, the Prepayment Amount (as such term is
defined in the “PROPOSAL NO. 1 – APPROVAL OF THE BUSINESS COMBINATION – The
Purchase Agreement – Related Agreements” section below). We will not have access
to the Prepayment Amount immediately following the Closing, and depending on the
manner in which the Forward Purchase Transaction is settled may never have
access to the Prepayment Amount, which may adversely affect our liquidity and
our capital needs following the Business Combination.

The Definitive Proxy Statement is amended and supplemented on page 118 by adding
the following to the “PROPOSAL NO. 1 – APPROVAL OF THE BUSINESS COMBINATION –
The Purchase Agreement – Related Agreements” section of the Definitive Proxy
Statement:

Forward Purchase Agreement

On June 16, 2022, the Company, the Target, and Midtown East, entered into the
Forward Purchase Agreement. Pursuant to the terms of the Forward Purchase
Agreement (a) Midtown East intends, but is not obligated, to purchase shares of
Class A Stock after the date of the Forward Purchase Agreement from holders of
Class A Stock, other than the Company or affiliates of the Company, who have
requested that their shares of Class A Stock be redeemed or indicated an
interest in having their shares of Class A Stock redeemed pursuant to the
redemption rights set forth in the Amended and Restated Certificate of
Incorporation in connection with the Business Combination and (b) Midtown East
has agreed to waive any redemption rights in connection with the Business
Combination with respect to any shares of Class A Stock it purchases in
accordance with the Forward Purchase Agreement, or FPA Subject Shares. The
number of FPA Subject Shares shall be no more than the lesser of (i) 5,000,000
and (ii) the maximum number of shares of Class A Stock such that Midtown East
does not beneficially own greater than 9.9% of the Class A Stock on a
post-combination pro forma basis.

The Forward Purchase Agreement provides that (a) one business day following the
closing of the Business Combination, the Company will pay to Midtown East, out
of the funds held in the Company’s trust account, an amount (the “Prepayment
Amount”) equal to the Redemption Price (as defined in Section 9.2 of the Amended
and Restated Certificate of Incorporation per share (the “Initial Price”)
multiplied by the aggregate number of FPA Subject Shares and Additional Shares
(as defined in the Forward Purchase Agreement), if any (together, the “Number of
Shares”), on the date of such prepayment, (b) on the first business day of each
calendar quarter after the closing of the Business Combination, the Company will
pay to Midtown Madison Management LLC a structuring fee in the amount of $5,000
per quarter and (c) on the date occurring one settlement cycle following the
valuation date (which shall occur on the earlier of (i) the third anniversary of
the closing of the Business Combination and (ii) the date specified by Midtown
East in a written notice (not earlier than the day such notice is effective)
that, during any 30 consecutive scheduled trading day-period following the
closing of the Business Combination, the volume weighted average trading price
per share for 20 scheduled trading days during such period shall have been less
than $3.00 per share, Midtown East shall deliver to the Company the Number of
Shares less any Terminated Shares, as described below.

From time to time and on any scheduled trading day after the closing of the
Business Combination, Midtown East may sell FPA Subject Shares or Additional
Shares (or any other shares of common stock or other securities of the Company)
at its absolute discretion in one or more transactions, publicly or privately,
and, in connection with such sales, terminate the Forward Purchase Transaction
in whole or in part in an amount corresponding to the number of FPA Subject
Shares or Additional Shares sold (the “Terminated Shares”). At the end of each
calendar month during which any such early termination occurs, Midtown East will
pay to the Company an amount equal to the product of (x) the number of shares
terminated during such calendar month and (y) the Reset Price, where “Reset
Price” refers to, initially, the Initial Price. The Reset Price shall be
adjusted on the first scheduled trading day (as defined in the Forward Purchase
Agreement) of each month commencing on the first calendar month following the
closing of the Business Combination to be the lowest of (a) the then-current
Reset Price, (b) $10.00 and (c) the VWAP Price (as defined in the Forward
Purchase Agreement) of the last ten (10) scheduled trading days of the prior
calendar month, but not lower than $5.00; provided, however, that if the Company
offers and sells shares of Class A Stock in a follow-on offering, or series of
related offerings, at a price lower than, or upon any conversion or exchange
price of currently outstanding or future issuances of any securities convertible
or exchangeable for shares of Class A Stock being equal to a price lower than,
the then-current Reset Price (the “Offering Price”), then the Reset Price shall
be further reduced to equal the Offering Price.

The Company and Safe Harbor have agreed to pay (jointly and severally) to
Midtown East a break-up fee equal to the sum of (i) all quarterly structuring
fees and attorney fees and other reasonable expenses related thereto incurred by
Midtown East or its affiliates in connection with the Forward Purchase
Transaction, plus (ii) $1,000,000, upon the occurrence of an “Additional
Termination Event” following the consummation of the Forward Purchase
Transaction except where the Additional Termination Event occurred as a result
of regulatory items or a material breach of Seller’s obligations under the
Forward Purchase Agreement. An “Additional Termination Event” is defined under
the Forward Purchase Agreement to occur if (a) the Business Combination fails to
close on or before the Outside Date (as defined in the Unit Purchase Agreement,
and as such Outside Date may be amended or extended from time to time) or (b)
the Unit Purchase Agreement is terminated prior to the closing of the Business
Combination. Midtown East irrevocably waived any and all right, title and
interest, or any claim of any kind it has or may have in the future, in or to
any monies held in the Company’s trust account, and agreed not to seek recourse
against the trust account. Luminous Capital Inc., an affiliate of our Sponsor,
and Safe Harbor have agreed that any such break-up fee, if due, will be borne
equally by them.

Midtown East’s obligations to the Company under the Forward Purchase Agreement
are secured by perfected liens on (i) all cash proceeds of the sale, transfer,
or other disposition (other than in connection with any Permitted PB Activities
(as defined in the Limited Liability Company Agreement of Midtown East) and cash
flow posted to Midtown East as credit enhancements under those Permitted PB
Activities) of FPA Subject Shares; (ii) the deposit account of Midtown East in
which such cash proceeds will be deposited; and (iii) proceeds and products of
the foregoing. The deposit account will be subject to a customary deposit
account control agreement in favor of the Company.

Midtown East has agreed to waive all redemption rights under the Amended and
Restated Certificate of Incorporation that would require redemption by the
Company of the FPA Subject Shares. Such waiver may reduce the number of shares
of common stock redeemed in connection with the Business Combination, which
reduction could alter the perception of the potential strength of the Business
Combination.

Midtown East may assign its rights under the Forward Purchase Agreement if the
Number of Shares acquired by it exceeds 9.9% of the Company’s shares of Class A
Stock outstanding.
. . .

Item 9.01. Financial Statements and Exhibits.




(d) Exhibits.

Exhibit No.   Description

10.1            Forward Purchase Agreement

99.1            Press Release

104           Cover Page Interactive Data File (Embedded within the Inline XBRL
              document and included in Exhibit)

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